Forward helps investors meet challenges through innovative strategies and fresh ideas. It explores alternative income strategies including real estate preferreds, real estate and infrastructure, and municipal bonds. Several funds and their managers are mentioned that implement these strategies.

1. Exploring Alternative Sources of Income
J. Alan Reid, Jr.
Co-Founder and CEO, Forward
June 12, 2012

2. Helping investors move forward
The power to adapt
Forward helps investors, advisors and institutions meet the challenges of an ever-changing global
investment climate. With fresh ideas and innovative strategies, we are striving to lead the industry in
new directions.
 Unbounded thinking
 Outcome-oriented
 Access to alternatives
 Strong investment framework
 Specialized expertise
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 1

3. Outcome-oriented solutions
TACTICAL LONG/SHORT
• Tactical Growth • Commodity Long/Short
• Tactical Enhanced • Real Estate Long/Short
Alternative • Tactical Growth (SMA) • Credit Long/Short
Solutions • Global Credit Long/Short
• Endurance (LP)
• Condor (LP)
DIVIDEND STRATEGIES INCOME ORIENTED ASSET STRATEGIES
• Large Cap Dividend Fund • Select Income
• US Dividend (SMA) • High Yield Bond
Strategic • Investment Grade Fixed Income
Income • Real Estate
• Emerging Markets Corporate Debt
• PYP (LP)
GLOBAL STRATEGIES EMERGING
• Global Infrastructure • Emerging Markets
• International Small Company • Frontier Strategy
Global • International Dividend • Select Emerging Markets Dividend
Exposure • International Real Estate
• Global Dividend (SMA)
• International Dividend (SMA)
ALLOCATION FUNDS SMALL CAP PORTABLE ALPHA
• Aggressive Allocation • Banking & Finance • Core Plus
• Growth Allocation • Growth • Extended MarketPlus
Advanced • Growth & Income Allocation • Small Cap Equity • Strategic Alternatives
Diversification • Balanced Allocation • Focus
• Income & Growth Allocation • SmallMid Core (SMA)
• Income Allocation
• US Government
FOR INVESTMENT PROFESSIONAL USE ONLY. Forward Firm Overview | 1/18/2012| Version 1 2

4. Lightning doesn’t strike twice
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 3

5. A frightening amount of money into bonds…
Net New Flows AUM
Category YTD 2011 2010 1 Year ∆ AUM Mar 12 Mar 11
1 Intermed-Term Bond 43,316.1 46,903.3 68,092.7 18.0 974,070.0 825,187.1
2 High Yield Bond 22,925.3 21,099.7 17,885.4 19.0 263,693.9 221,545.5
3 Diversified EM 18,391.5 19,143.9 58,261.2 4.9 319,857.7 305,027.3
4 Municipal Bond** 17,602.5 (10,594.9) 13,228.2 16.9 622,497.7 532,529.5
5 Target Date* 14,261.1 39,907.9 42,657.5 14.8 399,258.4 347,743.2
6 Short-Term Bond 11,534.9 15,457.7 42,331.8 13.9 233,200.1 204,662.6
7 World Allocation 9,259.0 25,569.3 28,056.9 10.3 327,237.2 296,719.2
8 Commodities**** 7,677.1 9,830.7 26,731.2 1.8 166,268.7 163,340.0
9 EM Bond 7,291.5 14,841.4 15,758.9 52.9 68,162.7 44,584.3
10 Conservative Allocation 7,234.0 12,228.3 13,516.3 12.0 189,042.0 168,854.2
16 Real Estate 3,851.1 4,505.9 4,017.7 19.8 86,473.9 72,168.0
23 Multialternative 1,496.5 5,274.3 4,301.5 41.4 19,178.3 13,566.3
26 Global Real Estate 1,219.6 3,664.0 2,077.3 9.8 32,694.6 29,771.7
30 Long/Short Equity 1,021.2 2,122.5 3,409.0 16.3 22,705.9 19,526.1
39 Managed Futures 540.5 4,740.3 1,823.6 48.5 9,207.7 6,200.3
67 Nontraditional Bond (2,121.2) 9,442.7 29,234.8 (1.5) 51,551.4 52,360.0
CONFIDENTIAL| Board of Directors Meeting| 5/31/2012

6. The “Lost Decade” Forced Investors to Rethink
Their Investment Strategies
-23.4%
Actual Return (by Decade) S&P 500
350% 10,000
300%
250% 1,000
Actual Return per Decade (%)
S&P Daily Close (Log Scale)
200%
150% 100
100%
50% 10
0%
-50% 1
30s 40s 50s 60s 70s 80s 90s 00s
Source: Standard & Poor’s, Forward Analysis. As of 12/31/2010.
© 2012 Forward Management, LLC. All rights reserved.
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 5

7. Running from the Perceived Volatility of Equity
Products, Investors Have Flocked to Bond Funds
Cumulative Net New Flows to Fixed Income Mutual Funds
1/1/2004 - 12/31/2011
2004 - 2007 2008-2011 % Increase
Credit Quality
High 34,676.5 235,067.4 578%
Medium 98,010.5 258,534.2 164%
Low 49,792.0 175,576.1 253%
Duration
Long 75,120.5 92,278.6 23%
Intermediate 107,000.0 240,271.4 125%
Short 358.5 336,627.8 93796%
Past performance does not guarantee future results
Source: Morningstar, Strategic Insight. As of 12/31/11
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 6

8. Alternative Income Strategies: REIT Preferreds
Forward Select Income Fund
Lead Manager Joel Beam
Ticker KIFYX
CUSIP 34987A160
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 7

9. Alternative Income Strategies: Real Estate & Infrastructure
Forward International Real Estate Fund
Lead Manager Michael McGowan
Ticker KIRYX
CUSIP 34986P101
Forward Real Estate Long/Short Fund
Lead Manager Ian Goltra
Ticker KSRYX
CUSIP 34987A145
Forward Global Infrastructure Fund
Lead Manager Aaron Visse, CFA*
Ticker KSRYX
CUSIP 34987A145
* Aaron Visse and Jim O’Donnell have earned the right to use the Chartered Financial Analyst designation. CFA Institute marks are trademarks of the CFA Institute.
Aaron Visse is a registered representative of ALPS Distributors, Inc.
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 8

10. Alternative Income Strategies: Munis
Forward Credit Analysis Long/Short Fund
Team Guy Benstead, Alan Hart, Jeffrey Hudson
Subadvisor Cedar Ridge Partners, LLC
Ticker FLSIX
CUSIP 349913533
FOR INVESTMENT PROFESSIONAL USE ONLY. Exploring Alternative Sources of Income | 6/12/2012 9